Under UNICAP,all of the following overhead costs are included in inventory except
A)factory utilities,rent,insurance and depreciation.
B)officers' salaries and factory administration.
C)research and experimentation.
D)factory payroll,purchasing and warehouse costs.

Question

Quizplus · Accepted Answer

UNICAP (Uniform Capitalization) requires certain direct and indirect costs associated with the production of inventory to be capitalized as part of the cost of the inventory. Direct costs include direct labor and direct materials, while indirect costs include factory overhead costs such as factory utilities, rent, insurance, depreciation, factory payroll, purchasing and warehouse costs. However, research and experimentation costs are not indirect costs of production and are not required to be included in inventory under UNICAP regulations. Therefore, option C is the best choice.

Under UNICAP,all of the Following Overhead Costs Are Included in Inventory